Roger Sutton CEO, CERA - speaking at Seismics and the City 2014 Building Momentum Local and central government, business and media perspectives on the Canterbury Recovery and Rebuild. What is your take on where we are with the rebuild? What are positive signs of progress and what's in the pipeline? What are the main obstacles and how can they be resolved?
1. Seismics in the City 28 March 2014 Canterbury Earthquake Recovery Roger Sutton Chief Executive CERA Disclaimer: CERA has made every effort to ensure that the information contained in this report is reliable but makes no guarantee of its accuracy or completeness and CERA does not accept any liability for any errors. The information contained in this report is not intended to be used as a basis for commercial decisions and CERA accepts no liability for any decisions made in reliance on them.
2. Page 5 Lead by Example See it Through Work Together Have an Impact Find a Way Commentary: There has already been a significant increase in the value of building work in place since the start of 2012. This was being driven predominantly by the residential sector initially, but the non-residential is beginning to equalise Note, that this data series excludes horizontal infrastructure (which in Christchurch is approx. $150m per quarter). Building activity: Greater Christchurch 0 100 200 300 400 500 600 700 800 900 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Quarterlyconstructionexpenditure($mil) Historic Residential Historic Non-Residential Rolling 12 Month Trend 3x increase over 12 quarters $809m /qtr $260m /qtr Building work underway Source: Statistics New Zealand and CERA 3. Page 6 Lead by Example See it Through Work Together Have an Impact Find a Way Commentary: Completion of under-cap claims (EQC: graph 8) is forecast for Dec 2014. The repair work is behind schedule (see next graphs) but claim settlement is remaining on track as cash settlements increase. Completion of over-cap claims (private insurers and Southern Response: graph 9) is forecast for Dec 2016. Actual completions are falling behind insurers own forecast targets creating a significant risk that the end completion date will not be met. See following graphs also. Undercap residential dwelling insurance claims settled Residential Insurance: summary Totals: Total under-cap properties: 145,400 Total over-cap properties: 1,962 Total under and over-cap: 167,362 Total undetermined: 2,638 Total properties with claims: 170,000 Settlements: Under-cap properties: 100,800 (69%) Over-cap properties: 9,119 (42%) Total under and over-cap: 109,919 (65%) Overcap residential insurance dwelling claims settled Source: CERA survey 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Actual Forecasted Q3 2013 Forecasted Q4 2013 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Actual Forecast (latest) Forecast (in July 2013) 4. Page 7 Lead by Example See it Through Work Together Have an Impact Find a Way SCIRT progress SCIRT Horizontal Infrastructure Progress (up to 30 January 2014) Commentary: The current progress rates for horizontal infrastructure repair are on track for a completion date of December 2016. Issues currently being examined include levels of service and funding for renewals. These may impact on forecast future work and/or the total cost and budget available for the work. Data source: SCIRT 5. Page 8 Lead by Example See it Through Work Together Have an Impact Find a Way Canterbury Labour Market Source: MBIE Labour Market indicators December 2013 (Change since December 2012) Indicator Canterbury NZ (000) (%) (000) (%) Employment +19.2 +5.9 +67.0 +3.0 Unemployment -4.7 -27.8 -15.0 -9.3 Unemployment Rate -1.5pp. (3.4) -0.8pp. (6.0) Employment Rate +2.3pp. (69.1) +1.1pp. (64.7) Indicator Male Female Employment Rate (%) 75.2 (-1.2pp.) 63.0 (+3.7pp.) Unemployment Rate (%) 2.3 (-1.7pp.) 4.7 (-1.5pp.) Canterbury Labour market Indicators by Gender December 2013 (Change since December 2012) 6. Page 9 Lead by Example See it Through Work Together Have an Impact Find a Way Construction cost inflation Commentary: Construction demand in Canterbury has increased prices, though this has been less apparent towards the end of 2013. There is a risk that these increases are spilling over into other regions, although the New Zealand figure still remains below the pre GFC level. Source: Statistics New Zealand Construction Cost Inflation (annual)